Novelis, a unit of Mumbai, India-based Aditya Birla Group, is the largest single producer of aluminum rolled products, accounting for about 14 percent of the world’s supply. Novelis, whose products end up in automobiles, beverage cans and flat-screen televisions, has historically been a bellwether of the economy. Shipments fell about 6 percent over the past three years.

Sales in the year ending March 2013 were $9.8 billion. During the first six months of its current fiscal year, sales were $4.8 billion, down slightly from the previous year’s $5 billion. Earnings for the first half of this year were $37 million, down from $140 million during the same period the year before.

But rising incomes in emerging markets and aluminum substitution by the North American automotive industry are expected to make 2014 “a year of substantial growth for Novelis,” Chief Commercial and Strategy Officer Brad Soultz said. “We’ve commissioned much of our $2 billion in expansions [globally] that will represent, conservatively, a 20 percent increase in capacity.”

During the six months ending in September 2013, the company invested $365 million on capital expenditures.

This year, Novelis plans to add more than 500 jobs in engineering, manufacturing, supply chain and information technology. As of March 2013, the company had about 11,000 total employees.

The Atlanta workforce is expected to grow 10 percent annually. Novelis plans to expand its 125,000-square-foot headquarters by about a third, taking more than 40,000 square feet at Two Alliance Center in Buckhead. The additional space, which can accommodate about 180 employees, will host Novelis’ IT operations hub, among other groups.

Novelis’ Atlanta workforce has increased 10-fold to nearly 500 since the company relocated to the city in 2005. In 2012, Novelis opened its Global Research and Technology Center in Kennesaw. The 160,000-square-foot facility serves as the global hub of the company’s research and development activities.

Atlanta has been “phenomenal” in terms of attracting and retaining corporate and technical talent, Soultz said.

A globally connected airport makes Atlanta a natural destination for a global headquarters. “We can reach any of our four regions in the world via direct flights,” Soultz said.

Novelis is as much an engineering company as it is a manufacturer — R&D accounted for 10 percent ($46 million) of Novelis’ fiscal 2013 spending. Engineering is a big part of the business as Novelis must develop new products and the processes to manufacture them.

Demand drivers

Novelis expects to invest about $500 million to $550 million in capacity expansion in fiscal 2015, beginning April 1, as it expands into new markets and invests in more sustainable production.

The U.S. expansion addresses the demand for more aluminum in automotive applications, said Brett Levy, a

managing director at Jefferies & Co.

“The hood of the Ford F-150 is now made of aluminum,” Levy said. “People are trying to get cars to be lighter weight, [and] are putting more aluminum in them.”

Growth projects are occurring in Brazil, where Novelis has a dominant position in the beverage can business, and in China and Korea, where the company sees opportunity in the aerospace and automotive markets.

Last July, the company began the commissioning process for an automotive sheet finishing facility in Oswego, N.Y.

For Novelis, the largest aluminum recycler in the world, a major challenge might be in sourcing adequate raw material.

“When you use beverage cans as your chief input, the challenge is to find more used beverage cans,” Levy said. “I don’t know if people recycle more or less, or where you find all the extra beverage cans to support your expansion.”

A large share of Novelis’ investment is in developing technologies to make its products more sustainable.

“In 2005, roughly one-third of our material inputs were from recycled content,” Soultz said. “We are on track to achieve a rate of about 50 percent by the end of this year, and 80 percent by the end of this decade.”

Going green is good PR — and it trickles down to the bottom line. Manufacturing products with recycled aluminum uses 5 percent of the energy required to make the same product from brand new aluminum that’s refined from the mineral bauxite.

While the automotive sector accounted for 6 percent of Novelis’ sales in fiscal 2013, the company sees that sector as having the greatest growth potential. Demand from the auto sector is expected to accelerate 30 percent annually by 2020, Novelis estimated.

In North America and Europe, Novelis is seeing demand as automakers substitute aluminum for steel. Regulatory requirements and consumer trends are driving a global shift toward more fuel-efficient cars.

Novelis also anticipates strong demand from the consumer electronics industry. Aluminum is used in everything from flat-panel televisions to handheld appliances, Soultz noted.

Novelis is seeing strong growth in emerging markets, such as Asia and South America. Urbanization, population growth and rising incomes in those markets is driving demand for lighter, more durable and easier to recycle aluminum products, Soultz said.

However, it may not be all smooth sailing in the year ahead.

In North America, Novelis faces “unfavorable pricing dynamics as a result of excess can capacity in a mature market,” JP Morgan Securities analyst Dave Katz noted in a November report.

This led the company to renew some existing customer contracts at less favorable terms, according to the analyst report. Novelis expected the contracts to be a drag over the next 12 to 18 months.

Over the midterm, however, Novelis believed additional auto demand will soak up excess capacity.

In Asia, the company benefited from increased demand, but suffered from the near-quadrupling of the Japanese metal premium, Katz noted.